834 OttoRentals Ltd is setting up a new car rental operation

8.34 Otto-Rentals Ltd. is setting up a new car rental operation. In the first year they purchase 12 vehicles for a total of $296,000. In year 2, they buy two more vehi- cles for $54,000. In year 3, they sell four vehicles for $58,000, and buy five new cars for $142,000. In year 4, they sell three vehicles for $32,000. These vehicles belong in CCA Class 16. Using columns similar to Schedule 8 (Figure 8.6), calculate the CCA and UCC for the four years for this pool of vehicles.

Solution

1 2 3 4 5 6 7 8 9 10 11 12 13 Class Number Undepreciated capital cost at the beginning of the year(amount from column 13 of last year\'s schedule 8) Cost of acquisitions during the year(new property must be available for use) Adjustments and transfers(show amounts that will reduce the undepreciated capital costs in brackets) Proceeds of dispositions during the year (amount not to exceed the capital cost) Undepreciated capital cost (Column 2 plus column 3 plus or minus column 4 minus column 5 50% rule (1/2 of the amount if any by which the net cost of acquisitions exceeds column 5) Reduced undepreciated capital cost (Column 6 minus column 7) CCA Rate % Recapture of capital cost allowance Terminal loss Capital cost allowance (for declining balance method, column 8 multiplied by column 9 or a lower amount) Undepreciated capital cost at the end of the year (column 6 minus column 12) 1 16 0 296000 0 0 296000 148000 148000 40% 59200 236800 2 16 236800 54000 0 0 290800 27000 263800 40% 105520 158280 3 16 158280 142000 0 58000 242280 42000 200280 40% 80112 162168 4 16 162168 32000 130168 0 130168 40% 52067.2 78100.8 5 16 78100.8 The Capital cost allowance rate for class 16 is 40% Cost of one vehicle of 12 purchased 296000/12 24666.66667 4 98666.66667 58000 40666.66667 Cost of one vehicle of 2 purchased 54000/2 27000 Sale of one vehicle of 4 sold 58000/4 14500 Cost of one vehicle of 5 purchased 142000/5 28400 Sale of one vehicle of 3 sold 32000/3 10666.66667 Workings